Down Round: Financing challenge for start-ups

A down round occurs when a startup closes a new round of funding at a lower valuation than the previous round, indicating a change in the perception of the company's value. This situation can affect company dynamics as it can dilute existing shareholders and potentially affect stakeholder and employee morale. Down rounds are often an indicator of challenges facing the company, but also provide an opportunity for reassessment and strategic realignment to promote long-term growth and stability.